GRAND FORKS – Proposed tax incentives for the Epitome Energy and Memorial Village II development projects received a general consensus to move forward during a Local Government Advisory Committee meeting on Monday, May 22.
The LGAC meeting was attended by two members from the Grand Forks City Council, Grand Forks County Commission, Grand Forks School Board and Manvel School Board and one member from the Grand Forks Park District.
In December, Epitome Energy announced plans to build a soybean crush plant on the north end of the city. The plant is expected to process approximately 42 million bushels of soybeans annually and produce approximately 924,000 tons of soybean meal, over 60 million gallons of soybean oil and 84,000 tons of soybean hulls annually. Two similar facilities are near Casselton and Spiritwood.
During the meeting, LGAC members reviewed the proposed 15-year 83% Payment in Lieu of Taxes (PILOT) agreement for the project. The current true and full value of the land on which the facility will be built is $60,000. After the project is complete the land value is estimated to be $4 million.
City Administrator Todd Feland told the Herald after the meeting the land is currently valued as agricultural property in Grand Forks County. The estimated $4 million values the land as industrial and as being annexed into the city.
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The revenue from the plant will be split between the city, county and park district. Manvel School District also will be receiving a share of revenue since the location of the site falls within the school district's jurisdiction.
Epitome Energy PILOT Breakdown by inforumdocs on Scribd
Mayor Brandon Bochenski said a lot of work associated with the project remains, including the infrastructure needs for potable and fire water supply, wastewater, stormwater and transportation access.
“I just want to say there’s a tremendous amount of work that has to be done. Environmental, transportation, water, wastewater. … We’re not greenlighting the project today — this is just the tax incentive portion,” Bochenski said.
A development agreement is being drafted, which will outline utility rates and fees, conditions of construction and other provisions. City Council President Dana Sande said the development is important as it will set the “minimum standards” that must be met by the developer.
Work on the development agreement will continue through the summer. Epitome Energy hopes to start site work this fall.
The $44 million Memorial Village II project entails a mixed-use building that will include commercial space proposed for the UND Bookstore, a restaurant/bar, offices and other commercial space. Additionally, residential space will entail 167 apartment units along with a fitness room and study rooms.
A softball complex with an NCAA regulation field is set to serve as a complementary addition to the Fritz Pollard Jr. Athletic Center.
The proposed PILOT agreement presented to LGAC members is a 20-year 90% tax incentive. Years 1-10 will have an exemption of 100% and years 11-20 will have an exemption of 80%.
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Memorial Village II PILOT Breakdown by inforumdocs on Scribd
The determination of the PILOT agreement percentage and length was determined by a third-party financial review performed by Baker Tilly.
In addition to the PILOT agreement, the city is proposing to provide a $2 million loan from the Economic Development Fund with an interest rate of 3% to be repaid over 20 years for the softball complex.
Several LGAC members said the development will be beneficial for UND while also benefiting the community. For example, the school district will be able to use the softball complex.
“We’ve talked about property taxes, but we also have to look at youth sports in general,” City Council member Danny Weigel said. “This gives us the opportunity to host an (Eastern Dakota Conference) high school fastpitch softball tournament, a state tournament (and) other youth tournaments that bring in a ton of revenue for our sales tax and everything else.”
A public hearing for both development projects has been set for a July 5 City Council meeting. In the meantime, the PILOT agreements will be discussed among each respective entity.
LGAC members were also briefed on The Exchange, a 100,000-square-foot industrial building that will be located in the strategic infrastructure growth area of I-29. It is being developed by Enclave Companies.
Council members approved a 100% five-year PILOT agreement application during their May 15 City Council meeting.
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